In a surprising trend, luxury watches are transcending their conventional role as fashion statements to become sought-after alternative investments. The exclusivity, craftsmanship, and scarcity of models are driving a significant surge in demand for luxury watches, resulting in substantial returns for investors in the pre-owned market.
The Investment Appeal of Luxury Watches:
Luxury watches are gaining attention as more than just stylish accessories, with investors viewing them as assets comparable to traditional investment avenues like stocks or gold. Dr. Karan Madan, a luxury watch collector, shared his experience of selling a Rolex at double the purchase price within a few years.
Comparing Returns:
Investors draw parallels between returns on luxury watches and other traditional investments. Despite being pre-owned, the scarcity of certain models has led to premium prices, echoing the patterns observed in gold and stock markets over the years.
Global Trend in the Luxury Watch Market:
A recent report by BCG highlights a global trend in the luxury watch market, with average prices for top models from leading brands rising at an annual rate of 20% from 2018 to 2023 in the secondhand market. This trend defied broader market downturns during the pandemic, showcasing the resilience of luxury watches as investment assets.
Supply Shortage Fuels Pre-Owned Market:
The scarcity of luxury watches is driving the pre-owned market, with high demand outpacing the availability of these timepieces. Rolex, a prominent luxury watch brand, faces a shortage that may persist for the next two years, according to a sales executive at a Mumbai store.
Growing Interest in Independent Watchmakers:
Luxury watches crafted by independent watchmakers, such as Cyrus Geneve and Mauron Musty, are also gaining traction in the market. Limited availability and unique craftsmanship make them attractive options for investors seeking exclusivity.
Luxury Watches in the Indian Market:
Data from the Federation of the Swiss Watch Industry indicates a 21% year-on-year increase in the import of Swiss luxury watches in India between January and June 2023. Ultra-high net worth individuals in India are increasingly considering watches along with art and luxury handbags as passion-led investments, according to a Knight Frank study.
